December 20, 2010The Asian Balancegeopolitics

Touching base with Timor Leste

The absence of an Indian embassy in Dili reveals the limits of India's Look East policy

Business Standard This is an unedited draft of my monthly The Asian Balance column that was published in Business Standard from 2010-2017. The column’s agenda was to persuade Indian policymakers to take an active interest in a region that has since come to be called the Indo-Pacific.”

Just an Indian embassy, flying your flag on its rooftop, will give us the confidence we need.” That was one of Timor-Leste’s most influential cabinet officials responding to my question on how India could play a role in the development of Asia’s newest democracy. The young nation is located on Asia’s easternmost edge, as the same official reminded me, in the Indian Ocean, not the South China Sea.”

My report on how India could better engage Timor Leste is available on Takshashila’s website.

With natural gas revenues beginning to flow in, the country — for long a Portuguese colony, then a part of Indonesia, before being midwifed into independence by the United Nations — is likely to escape the financial straits that many others in similar situations face. But its leaders are beginning to realise that there a couple of big problems that money cannot solve easily: policy autonomy and human capital.

Australia played an instrumental role in providing security after the violent tumult and socio-economic upheaval accompanying Timor-Leste’s separation from Indonesia. It still retains a military presence in the country and provides around $100m yearly in assistance. Australia also manages the natural gas fields that bankroll the Timorese government’s budget. Portugal, the former colonial power, retains disproportionate political influence. Despite criticism from international human rights advocates, the Timorese leadership has frozen the cases of crimes committed by withdrawing Indonesia military troops and their proxies. Timor-Leste’s relations with its giant neighbour, as a result, are not hostage to the terrible past.

Most importantly, China has made significant inroads into the country. In just a handful of years, it built the presidential palace, the foreign ministry building, the defence headquarters and is now building staff quarters for the Timorese military officers. Even as its political leaders debate what kind of a navy the country ought to have, the Timorese government has already purchased used Shanghai-class patrol boats. Some of these deals are clearly constitute official Chinese assistance, others the handiwork of resourceful wheeler-dealers who have a knack for disposing off surplus Chinese industrial and military equipment.

It is very hard for the government of a small country to say No” to the foreign powers who have so much influence over its politics and its economy. If it wishes to retain a degree of autonomy over its internal affairs, its best bet is to engineer a balance such that no single foreign power can dominate. The less removed the foreign power is from domestic and regional politics the better. That’s why Timor-Leste’s political leaders want to see the Indian flag flying in Dili.

India does not have any diplomatic presence in Timor-Leste. The Indian ambassador in Jakarta is accredited to the country. While the Indian Cabinet has approved a plan to expand the number of Indian diplomatic missions around the world, Timor-Leste might not be high priority: it is not a problem” country, it does not have an Indian diaspora, it is not a member of the Commonwealth and there is very little trade and investment between the two countries. That last might change if Reliance Petroleum — which just began test drilling in Timor Sea — discovers gas in its exploratory block next month.

Yet, even without the natural gas angle, it is important for India to ensure that its Look East policy does not leave Timor-Leste out of its ambit. This is not to suggest that India should follow the Chinese model of diplomacy by real-estate development. Rather, that India is well-placed to play a crucial role in Timor-Leste by addressing the country’s fundamental challenge — developing human capital.

The conflicts of the last century have left Timor-Leste with a young population that lacks basic skills in agriculture, fishing, industry, services and government. Everywhere in the country I found businesses unable to grow because of a shortage of skilled labour and trained supervisors. From coffee plantations that can’t find enough workers to fish being hung out on trees because there is no fish market in Dili, Timor-Leste’s economic narrative is that of the missing middle.” There are opportunities here for intrepid Indian entrepreneurs who can help close the skills gap by providing employment-linked training services.

I have written more about this in this issue of Seminar magazine.

The Indian government is providing small grants for socio-economic development, a duty free tariff scheme for imports from Timor-Leste and a number of scholarships for undergraduate and postgraduate studies in India. The problem is, as President José Ramos-Horta told me, Timor-Leste has been unable to make use of the scholarships, mainly because they do not have students capable to taking these up. Where they do need help — in graduate medical education — scholarships are hard to come by.

This speaks of the need for New Delhi to put greater thought in how it makes the most of its new role as a net giver of foreign aid. It is possible to translate relatively modest allocations of public funds into greater influence for India abroad if the energy of the private sector is harnessed. Human capital, entrepreneurship and bottom-up development can form the cornerstones of the Indian touch not just in Timor-Leste but in other countries as well. It is no longer tenable, though, to expect our ambassadors to do both diplomacy and development. New Delhi must create an international development agency, under the external affairs ministry, that will put the Indian development model in action around the world.

You can read more of these columns in the The Asian Balance archive.

So why can’t India put its flag on a rooftop in downtown Dili? One reason is that we do not have enough foreign service officers. All for the want of a horseshoe nail?”

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